Broadcom Inc. (NASDAQ:AVGO)

The analysis of the quarterly financial ratios reveals distinct trends in profitability and efficiency over the observed periods.

Gross Profit Margin

The gross profit margin shows a consistent upward trend from early 2020 through late 2023, increasing from approximately 55.3% to a peak near 68.9%. This indicates improving cost management or enhanced pricing power. However, after reaching this peak, a slight decline is observable in early to mid-2024, descending to about 63.0%, before a rebound towards 66.8% by mid-2025.

Operating Profit Margin

The operating profit margin exhibits a strong growth trajectory, rising from around 15.9% at the start of 2020 to a peak exceeding 45% by late 2023. This suggests increased operational efficiency or favorable cost structure changes. Following this high point, a noticeable contraction occurs in early 2024, reducing the margin to approximately 26.1%. Subsequently, a recovery phase is visible, with margins rising again to 37.7% by mid-2025.

Net Profit Margin

Net profit margin mirrors the positive trend seen in other profitability metrics, climbing from about 11.6% in early 2020 to a high near 39.3% by late 2023. However, a steep decline is evident in early 2024, where net margin falls sharply to roughly 10.9%. After this downturn, net profitability improves significantly up to mid-2025, reaching above 31.5%, indicating recovery in bottom-line performance.

Return on Equity (ROE)

ROE shows marked improvement over time, starting near 10.8% in early 2020 and soaring to over 63% by mid-2023, reflecting strong shareholder value creation. Despite this impressive rise, there is a dramatic dip in early 2024 to around 7.8%. A rebound is then observed, with ROE increasing again to approximately 25.8% by mid-2025, signaling partial restoration of equity profitability.

Return on Assets (ROA)

ROA follows a similar pattern, increasing steadily from about 3.3% at the beginning of 2020 to nearly 19.4% by late 2023, denoting enhanced efficiency in asset utilization. This is followed by a decline in early 2024 to approximately 3.0%, after which ROA progressively recovers to pass 11.4% by mid-2025, indicating improved asset returns after the trough.

Overall, the financial ratios depict robust growth and operational performance improvement through early 2023, highlighted by significant margin expansion and returns efficiency. The sudden decline across all key profitability and efficiency metrics in early 2024 suggests an adverse event or market condition impacting results. Nevertheless, the subsequent phase shows recovery and strengthening of financial health towards mid-2025, although not yet reaching previous peak levels. This pattern reflects resilience and adaptability in managing financial performance over the observed timeframe.

Net Revenue Trends

Net revenue demonstrates a consistent upward trend across the observed periods. Starting at approximately 5.86 billion USD, revenue rises steadily, reaching over 15.9 billion USD by the most recent quarter. There are no significant declines, indicating sustained growth with periodic acceleration, particularly noticeable from early 2023 onwards.

Gross Margin Trends

Gross margin has increased significantly over time, moving from approximately 3.26 billion USD to over 10.7 billion USD. This increase mirrors the growth in net revenue but reflects a higher growth rate in absolute gross profit values. The growth in gross margin suggests an improving cost structure or higher value product sales.

Gross Profit Margin Percentage Trends

The gross profit margin percentage shows a clear positive trend for the majority of the periods, beginning slightly above 55% and climbing above 68% through late 2023. This improvement indicates enhanced profitability at the gross level, possibly due to cost efficiencies or favorable pricing dynamics. However, following the peak, a moderate decline occurs, with the margin percentage settling in the mid-60s in the most recent quarters, still reflecting a healthy gross margin.

Overall Financial Performance Insights

The data exhibits strong revenue growth alongside improving profitability metrics, as seen in rising gross margins in both absolute and percentage terms. The growth suggests effective management of cost of goods sold relative to sales increases. The slight retreat in gross profit margin percentages after peak levels could warrant monitoring but does not currently display a severe profitability erosion.

Conclusion

The financial performance over the reported periods indicates a robust upward trend in sales and profitability. The improvements in gross profit margins suggest ongoing operational efficiencies or a favorable product mix contributing to higher profit levels. Continued observation of margin trends is advised to confirm the sustainability of recent improvements.

The financial data reveals notable trends in operating income, net revenue, and operating profit margin over the analyzed periods. These trends reflect changes in the company's financial performance across multiple quarters.

Operating Income

Operating income demonstrated a consistent upward trajectory from early 2020 through late 2023, rising from 714 million USD to a peak of 4,240 million USD. This growth indicates strengthening profitability from operations during this timeframe. However, in early 2024, a significant decline is evident, dropping to 2,083 million USD, followed by a recovery trend reaching 6,260 million USD by early 2025 and slightly tapering off thereafter, suggesting a volatile but generally positive growth trend toward the end of the period.

Net Revenue

Net revenue increased steadily throughout the entire period, starting at 5,858 million USD in early 2020 and reaching 15,952 million USD by mid-2025. This indicates sustained growth in the company's sales or service income. Of note is the acceleration of revenue growth beginning in early 2024, where revenue surged from approximately 9,295 million USD in late 2023 to nearly 16,000 million USD by mid-2025, showing significant expansion in the company’s market or pricing power.

Operating Profit Margin

The operating profit margin improved markedly from 15.9% in early 2020 to a high around 45% by late 2023, reflecting enhanced operational efficiency or higher profitability per revenue dollar. A decline occurred starting in early 2024, dropping to approximately 26.1% by late 2024, before rebounding somewhat to near 38% in mid-2025. This fluctuation suggests some challenges impacting operational profitability during the early 2024 period, followed by partial recovery.

In summary, the company experienced strong growth in both operating income and net revenue, accompanied by improving operating margins up until late 2023. The early 2024 period shows a notable dip in operating income and profit margins despite continued revenue growth, indicating potential cost pressures, margin compression, or other operational challenges. Subsequent quarters show a recovery in profitability metrics, pointing to successful mitigation of these challenges.

The financial data indicates a general upward trend in net revenue over the observed periods, reflecting consistent growth in the core business activities. Starting from approximately $5.86 billion, net revenue increased steadily, reaching over $15.95 billion in the most recent quarter. This sustained increase suggests effective revenue generation and possibly expanding market presence or improved sales performance.

Net income exhibits a less uniform pattern compared to net revenue but generally shows growth until a notable setback occurs in the quarter ending November 3, 2024, where a significant loss was recorded. Initially, net income grew from $385 million to a peak of over $3.7 billion, indicating improved profitability. However, the sharp decline to a loss of $1.875 billion signals a considerable adverse event or expense during that period. Following this loss, net income recovered strongly, climbing to $5.5 billion before slightly declining but remaining robust at around $4.1 billion towards the last data points.

The net profit margin follows an overall increasing trajectory in the earlier periods, denoting improving efficiency or higher profitability relative to revenues. Margins rose from just over 11% to a peak near 39%, reflecting strong operational leverage or favorable cost management. Despite this positive trend, a decline in margins is observed starting early 2024, dropping to around 11% concurrent with the net income loss. Afterwards, margins show recovery, climbing back above 30%, indicating restored profitability levels and possibly corrective measures implemented post-loss.

Revenue Growth

Consistently increasing over the periods, signifying business expansion and effective sales strategies.

Net Income Volatility

Initial steady increases followed by a sharp loss in late 2024, then a strong rebound, reflecting possible one-time costs or extraordinary items impacting profitability.

Profit Margin Trends

Strong improvement up to late 2023/early 2024, followed by a drop aligned with the income loss, and subsequent recovery, highlighting fluctuations in operational efficiency or expense management.

In summary, the company demonstrated stable revenue growth and improving profitability margins for most of the period. However, significant volatility in net income and profit margins occurred around the end of 2024, likely due to unusual or non-recurring factors. Subsequent quarters suggest a rebound and return to higher profitability, indicating resilience and potential management effectiveness in addressing the challenges faced during the downturn.

The analysis of the financial trends over the reported periods reveals notable fluctuations in net income, stockholders’ equity, and return on equity (ROE).

Net Income (Loss)

The net income shows a general upward trend from early 2020 through early 2023, peaking consistently above 3 billion US dollars during this period. From February 2020, net income rose from 385 million to a high point of 3,774 million in January 2023. However, starting around April 2023, net income exhibited volatility, with a significant decline in February 2024 to 1,325 million, followed by a negative value of -1,875 million in August 2024. This indicates a loss during that quarter. Subsequently, net income recovered sharply to 4,324 million in November 2024 and remained elevated in the range of approximately 4 to 5.5 billion US dollars through mid-2025, though showing a slight decreasing trend toward August 2025.

Stockholders’ Equity

Stockholders’ equity was relatively stable and slightly declining from early 2020 through 2022, decreasing from approximately 24,368 million US dollars to a low around 20,876 million by July 2022. Starting late 2022, the equity began to recover and increased to approximately 23,988 million by October 2023. Thereafter, a substantial increase is observed beginning in February 2024, with equity sharply rising to over 70 billion US dollars and maintaining this elevated level through mid-2025. This large increase indicates significant changes in equity structure or capital inflows during this later period.

Return on Equity (ROE)

The ROE trend closely follows net income developments, initially showing a steady increase from about 10.8% in early 2020 to a peak of approximately 63% by mid-2023. This suggests increasing profitability relative to the equity base during that period. Starting in early 2024, ROE declines markedly to around 16.5%, decreases further to under 8% by August 2024, coinciding with net income losses. Thereafter, ROE recovers toward 25.8% by August 2025. These variations imply fluctuating efficiency in generating returns on equity, influenced by the income loss and subsequent recovery phases.

In summary, the data demonstrates a period of growth and increasing profitability through early 2023, followed by a volatile phase with a significant net loss and reduced ROE in 2024. Concurrently, stockholders’ equity experienced a large increase after early 2024, possibly indicating capital restructuring. The latter half of the period shows recovery in profitability metrics, yet with some evidence of variability in income and returns. These patterns suggest transitional financial dynamics that may require further investigation to understand underlying causes fully.

The financial data reveals notable fluctuations and trends over the observed periods. Net income shows an overall upward trajectory from early 2020 through late 2023, peaking several times before experiencing a significant decline in early 2024, followed by a recovery. Total assets demonstrate relative stability initially, with minor fluctuations, before a marked increase starting in early 2024 and then slight decreases towards mid and late 2025. Return on Assets (ROA) aligns with net income trends, generally increasing over the initial years and reaching its highest values around late 2023, then sharply declining in early 2024, with some recovery in subsequent quarters.

Net Income (US$ in millions)

From February 2020 to October 2023, net income consistently increased, rising from $385 million to $3,524 million. This reflects strong profitability growth during this phase. However, in February 2024, there is a sharp decrease to $1,325 million, followed by volatility with values oscillating including a negative figure in August 2024 (-$1,875 million), indicating a temporary significant loss. The net income recovers strongly in the last observed periods, reaching $5,503 million before slightly decreasing but remaining substantially above earlier levels.

Total Assets (US$ in millions)

Total assets show a relatively steady range around $71 billion to $81 billion from early 2020 to late 2023, suggesting a stable asset base with minor variances. Starting February 2024, assets notably increase, peaking around $177 billion, before a gradual decrease to near the $165 billion range by late 2025. This sharp increase in early 2024 may reflect strategic acquisitions, investments, or other balance sheet expansions, followed by some contraction or asset revaluation afterwards.

Return on Assets (ROA %)

ROA exhibits an improving trend from 3.26% in early 2020 to a peak of approximately 19.44% in late 2023, indicating increasing efficiency in asset utilization and profitability over time. However, the metric experiences a notable decline starting in early 2024, dropping to 6.54% and further down to 3.03% by August 2024, consistent with the net income decline during this phase. Subsequent quarters show a recovery trend, culminating in an ROA of 11.43% by August 2025, though still below the prior all-time highs.

In summary, the data reflects a period of robust growth in profitability and efficiency through late 2023, accompanied by a steady asset base. This is followed by significant volatility starting in early 2024, characterized by a sharp increase in total assets alongside a drop in profitability and ROA. The latter part of the timeline hints at a partial recovery. These patterns suggest a transformative period possibly driven by strategic changes, market conditions, or one-time events affecting earnings and asset composition.